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This lesson on Marketing strategy introduces the concept of Pricing.
Watch more at https://www.udemy.com/mba-in-a-box-business-lessons-from-a-ceo .
This video is part of a series of short lessons about Business Strategy. The complete module can be found on Udemy, as a core part of the MBA in a Box course by CEO Valentina Bogdanova and 365 Careers.
The course provides a complete Business Education: Business Strategy, Management, Marketing, Accounting, Decision Making & Negotiation in just under 10 hours.
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Marketing module table of contents:
Marketing: An Introduction
Introduction to Marketing
What is Marketing’s role?
Who works in Marketing?
Marketing’s key processes
Marketing: Building a Marketing Strategy
What is a marketing plan?
The psychology of customers – needs, wants, and demands
Conducting marketing research
The different stages of marketing research
Collecting Primary Data for Marketing Research
Performing client segmentation
Choosing a target customer group
Marketing: How to set up an effective Marketing Mix
The four Ps of Marketing and their importance
Marketing: How to set up an effective Marketing Mix – Product decisions
The product concept
Classifying a firm’s products
The typical product lifecycle
Product branding
Product packaging
Marketing: How to set up an effective Marketing Mix – Pricing decisions
The variables influencing product pricing
The demand curve
Performing break-even calculations
Marketing: How to set up an effective Marketing Mix – Place decisions
Setting up product distribution
Types of distribution channels
The advent of e-commerce
Marketing: How to set up an effective Marketing Mix – Promotion decisions
The essence of marketing promotion
Creating a marketing campaign
The importance of social media
Marketing: How to set up an effective Marketing Mix – A dynamic concept
The four Ps of Marketing – A dynamic concept
Marketing: Marketing strategy in the long run
Allocating the funds available for Marketing – The budgeting exercise
Using KPIs to improve decision-making
Short-term vs. Long-term marketing goals
Interpreting and calculating the Customer-Lifetime-Value formula
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Pricing is the one variable a company can change overnight and see an immediate effect on revenues and profits. However, pricing decisions inconsistent with a firm’s competitive strategy can be dangerous, which is why companies should address the topic with much caution and attention.
There are three important components we need to distinguish in this process.
The amount a product costs to be produced, the price customers pay to buy the product, and the value they acquire from the product.
If a company aims at cost leadership, then the focus will be costs (trying to keep them as low as possible). The company must offer a price slightly lower than the one offered by competitors.
Conversely, if a firm’s strategy is differentiation, then the critical factor will be the value delivered to customers. Costs are not that important, as companies offering a differentiated product can charge more.
So, pricing must be coherent with competitive strategy, although sometimes it is tempting to adjust prices to stimulate short-term gains of market share and increases of sales. Top-level managers have to stay focused on the big picture and make coherent decisions in line with the firm’s long-term strategy.